LONDON (Thomson Financial) - The Association of British Insurers confirmed
it has issued a warning to investors over the system of bonuses employed by
global banking group HSBC Holdings Plc.
An ABI official said on Thursday: "We have placed them on an amber top
alert, meaning that there are concerns that investors need to examine
carefully."
The move comes after sustained concerns from shareholders that HSBC's bonus
package sets benign performance targets and as activist investor Knight Vinke
continues to pile pressure on directors over corporate governance and strategy
issues.
Knight Vinke was also responsible for raising initial concerns over the way
the HSBC incentive package was presented.
The ABI official said: "There was extensive consultation with the company
and improvements were made to the scheme. This is now a matter of shareholder
judgement."
The Financial Times this morning quoted an investor in HSBC as saying: "The
bonuses are overly complex and we are unhappy that in the current environment
HSBC is increasing the potential bonuses which are already based on rich basic
salaries.
"The result is a very big leap in overall pay at a difficult time for
banks."
By Joel Dimmock: +44 (0) 20 7422 4809; joel.dimmock@thomsonreuters.com
jad/vlb
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